1887

OECD Regional Development Working Papers

Working papers from the Regional Development Policy Division of the OECD cover a full range of topics including regional statistics and analysis, urban governance and economics, rural governance and economics, and multi-level governance. Depending on the programme of work, the papers can cover specific topics such as regional innovation and networks, the determinants of regional growth or fiscal consolidation at the sub-national level.

English

The impact of road infrastructure investment on incumbent firms in Korea

This paper develops an indicator that combines the area that residents can reach within a certain time of travel with population density to create a proxy for “accessibility”, i.e. access to employment and consumption opportunities. Using a large scale firm level dataset, with nearly one million firm year observations over 14 years, the paper quantifies the link between firm-level outcomes and the change in accessibility in Korea due to the expansion of the network of major roads. The results suggest that the most productive firms benefited in terms of employment, output, and productivity, as accessibility improved. For the majority of incumbent firms, improved accessibility leaves most balance sheet variables broadly unaffected, but is associated with a decrease in fixed assets. The estimates also suggest that there was little job displacement, with the exception of service sectors where employment increased in response to improved local accessibility and declined for long distance accessibility.

English

Keywords: productivity, firm-level data, employment, accessibility, capital, highways, roads
JEL: R40: Urban, Rural, Regional, Real Estate, and Transportation Economics / Transportation Economics / Transportation Economics: General; R32: Urban, Rural, Regional, Real Estate, and Transportation Economics / Real Estate Markets, Spatial Production Analysis, and Firm Location / Other Spatial Production and Pricing Analysis; L23: Industrial Organization / Firm Objectives, Organization, and Behavior / Organization of Production; R12: Urban, Rural, Regional, Real Estate, and Transportation Economics / General Regional Economics / Size and Spatial Distributions of Regional Economic Activity
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